Capitalism in Japan

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Because no nation has come half so far so fast, Japan is envied by capitalists elsewhere and looked upon as an example to emulate. Thirty years ago, its war-shattered economy was little more than one-third the size of Britain's. Today the Japanese G.N.P. exceeds the combined total of Britain and France, and the gap is certain to widen in the years ahead. The Japanese variant of capitalism cannot be readily or precisely copied, except perhaps by a few Asian countries, because it is rooted in a homogeneous, hierarchical society with a not so distant feudal past. Changes are slowly taking place, but disciplined workers still display an almost mystical loyalty to their companies, and paternalistic employers reciprocate by guaranteeing job security. Leaders of business, banking and government are members of a unitary elite, and they have a snug relationship. But Japan's system of capitalism does provide a lesson for the U.S. in one crucial respect. The nation's power elite, which shapes and guides the course of the economy as a whole, practices a democratic ideal that individualistic Americans claim as their own but often seem to ignore: the spirit of compromise and consensus. This has enabled the group-oriented Japanese to apportion wealth and nurture growth in one of the world's most cramped and populous countries. Though Japan's domestic markets are highly competitive, Japanese businessmen and government officials do not see one another as adversaries but as collaborators on behalf of the economy. They worked together, for example, in meeting the automobile pollution problem early in the 1970s. Reports TIME Tokyo Bureau Chief Edwin Reingold, who previously was stationed in Detroit: "Unlike the U.S. Congress and successive Administrations, the Japanese did not pick nice-sounding numbers out of the smog and set standards that nobody knew how to meet. Instead, they handled the emissions problem scientifically, taking cost-benefit ratios into account in order to...
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